Reference checks are a useful way for employers to gather information about applicants that they might not discover through the application and interview process. However, despite the usefulness of reference checking, many employers are legitimately concerned about lawsuits from former employees based on information provided in response to a request for a reference, and liability for the actions of employees in cases in which the company failed to conduct a thorough reference check. A detailed discussion of these legal issues is available.
To deal with employers' reluctance to provide information about former employees, a number of states have enacted laws “immunizing” employers against employee claims over such disclosures. The protections provided by these immunity laws are from claims for defamation of character—libel and slander. Alabama has not adopted a reference immunity law.
However, Alabama courts have held that statements made by an employer to a former employee's prospective employee are protected by a conditional privilege. The employer will not be liable for defamation if the communication is made in good faith, without actual malice, and the prospective employer has an interest in the communication; i.e., an interest in the employee's past job performance (Clark v. America's First Credit Union, 585 So. 2d 1367 (Ala. 1991)).
Practical Advice. Even with a qualified privilege, employers in Alabama that choose to give references should observe the following precautions:
• Insist on a written authorization from the employee/former employee who will be the subject of the reference or from the prospective new employer. The written and signed authorization should be kept on file ...